Exhibit 14.5 The Following Questions Are Based on the Information Below

question 65

Multiple Choice

Exhibit 14.5
The following questions are based on the information below.
An investor is considering 4 investments, A, B, C, D. The payoff from each investment is a function of the economic climate over the next 2 years. The economy can expand or decline. The following decision tree has been developed for the problem. The investor has estimated the probability of a declining economy at 40% and an expanding economy at 60%.
-In decision-making, luck

• A) often plays a role in determining whether good or bad outcomes occur
• B) can be quantified
• C) cannot be quantified
• D) can be ignored

---

Definitions:

Marketing Mix

The strategic combination of the four Ps—product, price, place, and promotion—used to market a product or service effectively.

Market Share

The percentage of an industry's sales that a particular company controls.

Ancillary Sales

Additional revenue generated from goods or services that complement a company's main business operations.

Customer Loyalty

The tendency of consumers to continue buying from the same brand or company, often due to satisfaction, convenience, or perceived value.